SIA, Emirates trim operations as world goes into quarantine

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Singapore Airlines (SIA) has announced further cuts to its capacity while Emirates will suspend most of its services by this Wednesday, as global border controls tighten further in the past week.

SIA’s latest decision will result in the suspension of 96 per cent of the capacity that had been originally scheduled up to end-April, and the grounding of around 138 SIA and SilkAir aircraft, out of a total fleet of 147.

SIA has no clear dates for the resumption of services

Low-cost unit Scoot will also suspend most of its network, resulting in the grounding of 47 of its fleet of 49 aircraft.

In a press statement, SIA said it is unclear when normal services can resume, given the uncertainty as to when the stringent border controls will be lifted.

The resultant collapse in the demand for air travel has led to a significant decline in SIA’s passenger revenues.

The company is actively taking steps to build up its liquidity, and to reduce capital expenditure and operating costs. It had announced earlier this month some austerity measures that include salary cuts for the group’s management, and a voluntary no-pay leave scheme up to certain management positions.

Given the worsening situation, SIA said the unions have been engaged on additional cost-cutting measures needed and more steps will be taken imminently.

Meanwhile, Dubai-based Emirates will temporarily suspend most of its passenger operations by March 25, after resisting this move for “as long as feasible to help travellers return home amid an increasing number of travel bans, restrictions, and country lockdowns across the world”, it explained in a press statement.

Emirates Group has also undertaken a series of measures to contain costs, such as freezing all non-essential recruitment and consultancy work, encouraging employees to take paid or unpaid leave in light of reduced flying capacity, a temporary reduction of basic salary for the majority of employees – with the exception of junior level employees – for three months, ranging from 25 per cent to 50 per cent; and a total basic salary cut for three months for presidents of Emirates and dnata.

Sheikh Ahmed bin Saeed Al Maktoum, chairman and chief executive of Emirates Group, said: “Rather than ask employees to leave the business, we chose to implement a temporary basic salary cut as we want to protect our workforce and keep our talented and skilled people, as much as possible. We want to avoid cutting jobs. When demand picks up again, we also want to be able to quickly ramp up and resume services for our customers.”

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